Despite the existence of many electronic bill payment systems, many banks, credit card companies, utilities, businesses, and other institutions that bill customers still receive a substantial amount of payments in the mail. Opening, sorting, and processing all of this mail can be costly and time consuming. In the United States, the passing of the Check Clearing for the 21st Century Act (“Check 21”) by Congress allowed recipients of paper checks to create a digital version of the paper check called an Image Replacement Document (“IRD”). Under Check 21, IRDs, officially named “Substitute Checks,” became a legal substitute for original paper checks. The IRDs generally include front and back images of the original check, together with other data presented by a magnetic ink character recognition (MICR) line along the bottom of the IRD, where such other data typically includes the routing and transit number, the check-writer's account number, and/or the dollar amount of the check.
Many business-to-business payments and other payments are sent in the form of a check attached to a stub, also sometimes referred to as a payment stub or invoice. In such instances, the check is manually separated from the stub before the check is processed or, in an electronic image check system, an image of the check is recorded. Manually separating each check from a payment stub can, in some conventional systems, take an average of at least three seconds per transaction. It has been estimated that, for a large institution that processes, for example, ten million checks per month that are attached to payment stubs, the separating of the check from the stub would translate to approximately $1.5 million annually in labor hours. It has also been estimated that manually separating a check from a stub accounts for approximately eight percent of the time to process a paper check from the time it arrives in an envelope until it is imaged and stored. For these reasons, an automated system for processing checks that have payment stubs attached would be desirable.